Hess Newark Energy Center (Board decision, November 20, 2012)

Plain-English summary

The Ironbound Community Corporation and the New Jersey Environmental Justice Alliance challenged parts of an integrated permit for Hess Newark Energy Center's planned 655-megawatt natural-gas-fired power plant. They argued that the New Jersey Department of Environmental Protection should have required an analysis comparing alternative sites, production processes, and environmental controls. The Board explained that those arguments concerned nonattainment New Source Review requirements under New Jersey law, not the federal Prevention of Significant Deterioration portion of the permit. Because the Board's jurisdiction was limited to federally administered PSD requirements, it dismissed the petition. The order does not impose a penalty or decide the merits of the state-law permitting claims.

Decision snapshot

• Cited authorities: 40 C.F.R. §§ 1.25, 51.160, 52.1578, 124.19, and 124.41; 42 U.S.C. §§ 7407, 7471, and 7501-7503
• Outcome: The petition was dismissed for lack of jurisdiction.
• Key point: The EAB's jurisdiction over a combined permit does not extend to challenges concerning state-law nonattainment requirements outside the federal PSD program.

Full text (EPA EAB public release)

            BEFORE THE ENVIRONMENTAL APPEALS B'WP..I.~                              ny 2
        UNITED STATES ENVIRONMENTAL PROTECTIO          N                            ~      0 2m2
                        WASHINGTON, D.C.
                                                                        CLERK ENVIRONMENT          BOARD
                                                                         INITIALS


                                        )
                                        )

In re: Hess Newark Energy Center ) PSD Appeal No. 12-02
)
)
PSD Permit No. BOP110001 )

------------------------)

                          ORDER DISMISSING PETITION


                             1. STATEMENT OF THE CASE

   On October 13,2012, the Ironbound Community Corporation and the New Jersey

Environmental Justice Alliance (collectively "Petitioners") filed a petition under 40 C.F.R. §

124.19 seeking review of certain aspects of an integrated "Air Pollution Control Operating

Permit, Prevention of Significant Deterioration Permit and Initial Operating Permit" that the New

Jersey Department of Environmental Protection ("NJDEP") issued to Hess Newark Energy

Center ("Hess"). The integrated permit authorizes the construction and operation of a 655­

megawatt natural gas fired combined cycle power plant in Newark, New Jersey. Specifically,

relying on section 173 of the Clean Air Act ("CAA"), 42 U.S.c. § 7503(a)(5), and section 7:27­

18.3(c)(2) of the New Jersey Administrative Code, N.J. Admin. Code § 7:27-18.3(c)(2),

Petitioners claim that NJDEP failed to require Hess to submit "an analysis of alternatives sites,

production processes, and environmental control techniques that demonstrate that the benefits of

the proposed project outweigh its environmental and social costs." Petition for Review at 3. NJDEP and Intervenor Hess' moved to petition lack ofjurisdiction.

NJDEP's in Support Summary ISP()S1tlOn and Dismissal of the Petition (Nov. 8,

      Motion"); Motion to             Petition and                           (Nov. 7,



       explained in more detail below, the           Petitioners raise on appeal concerns

requirements apply to in "non attainment" areas,2 the Environmental Appeals

Board ("Board") not have jurisdiction over issues. Board therefore dismisses

petition for ofjurisdiction.

  , On October  201 the                            Board ("Board") received a motion

from requesting to intervene the proceedings of case, the on November 2012. In re Newark, Ctr., PSD Appeal 12-02, 201 (Order Granting to Intervene).

          CAA            the Environmental Protection Agency ("EPA") to
        areas within states, on a pollutant-by-pollutant basis, as being either "attainment"

or "nonattainment" with the National Ambient Air Quality Standard ("NAAQS"), or as being "unclassifiable." § 107(d), 42 § 7407(d). For areas nonattainment,
must develop a Implementation ('SIP') develop a Tribal
Plan that provides attainment of the NAAQS as expeditiously as practicable,
with CAA and " Air Quality
(PM) NAAQS, 58,688,
(nonattainment plan provisions in general).
or attainment, states must meet other
significant deterioration of quality
areas." 74 Reg. at 58,689. Although a geographic area may be ae~ngrlaH~a
or unclassifiable for one or more of the criteria pollutants
NAAQS, and as the permitting to the pollutants in that area. In re Sutter Power Plant, 8
n.2 (EAB 1999).

                                                 2

ANALYSIS

                  above, NJDEP                        an integrated pennit combining conditions

different including: (1) .....,..""",.., of Deterioration ("PSD"),

requlfes certain sources air pollutants located in areas U'"'~"F.J.,u.",u "unclassifiable" or

"attainment" obtain a pennit prior to beginning construction; (2) ("NAA") New

              ("NSR"), which                                     sources           in areas designated as

nonattainment for certain pollutants obtain a preconstruction and (3) V, which

requires that certain pollution sources obtain an PSD

portion of the pennit pursuant to a delegation

Agency which to authority to

issue PSD New Jersey.4 pennits issued by "delegated states" are considered

federal 5 Unlike PSD portion of the combined NJDEP the NAA

approval under state law pursuant to Jersey Chapter

           18, NJ. Admin. Code §                   18. Similarly, NJDEP               the portion

pertaining to the Title V to state law, New Jersey

      3
            Air Pollution Control                 Pennit, PSD                   and Initial Operating

for a Affected see NJDEP's Motion at
4
Regional Administrator U.S. Region 2, to
Martin, Commissioner Revisions to the Prevention ofSignificant
Quality (P SD) Program Delegation to New Jersey (July 1 11 ).

                          are states that have not adopted an EPA-approved            program as
               SIP, but have                    the            to               on behalf of the
         on EPA's                      In contrast, an "approved        is a state that administers

an "approved program." § 124.41. "approved program," its is a that contains procedures . issuance of and that been approved by in
with the and implementing regulations. 124 does not apply to PSD
pennits by states or eligible Indian tribes under an EPA-approved implementation plan.
40 C.F.R. § I lee).

                                                            3

Administrative Code Title 7, Chapter 27, Subchapter 22, N.J. Admin. Code § 7:27-22. EPA

previously had approved the latter two state programs as the State's NAA NSR6 and Title V

operating permiC programs, respectively.

   The statutory and regulatory provisions Petitioners claim NJDEP failed to satisfy apply

exclusively to the NAA NSR approval process of the integrated permit. Section 173 of the CAA,

cited by Petitioners, falls under Part D of the CAA, which sets forth requirements for

nonattainment areas. s Similarly, section 7:27-18.3(c)(2) of the New Jersey Administrative Code

falls under New Jersey's approved NAA NSR program. N.J. Admin. Code § 7:27-18.

   The Board is a tribunal of limited, not general, jurisdiction, and it cannot assert

jurisdiction over a challenged permit condition simply because it possesses jurisdiction over

other conditions in the permit. 40 C.F.R. § 124.19 (establishing Board's authority to review

permit determinations); see, e.g., In re DLP Energy, 9 E.A.D. 695 (EAB 2001) (stating that the

Board has limited jurisdiction to hear permit appeals). Under Part 124, the Board has jurisdiction

over permits issued under the federal PSD program, but such jurisdiction does not encompass

issues that are not governed or implemented by the federal PSD program. See, e.g., In re Russell

    6 See 40 C.F.R. §§ 52.1578, .1605; see also Approval and Promulgation of

Implementation Plans; Carbon Monoxide State Implementation Plan Revisions, State of New Jersey, 59 Fed. Reg. 56,019 (Nov. 10, 1994); Approval and Promulgation of Implementation Plans; Revision to the New Jersey State Implementation Plan for Carbon Monoxide, 61 Fed. Reg. 38,591 (July 25, 1996).

   7 Approval of New Jersey's Title V Operating Permit Program Revision, 72 Fed. Reg.

41,025 (July 26, 2007).

    S See 42 U.S.C. §§ 7501-7515.


                                              4

City Energy Or., PSD Appeal 08-1, slip op. at 40 (July 29,2008), 14 ("Russell

f') (quoting In re Sutter Power Plant, 8                     680, 688                1999) ("The           will deny

    of          that are not governed        the          regulations because it lacks jurisdiction over

them.")); re Dominion Brayton Point, r.U1J'-'CU No. 09-01, slip op. at

(May 13, 2009) Denying Petition for Review) Board's jurisdiction to PSD

permits extends only to those relating to permit conditions that implement federal PSD

           For that reason,     Board routinely                            of non-PSD issues brought in

context of a appeal. Dominion, slip op. at 4 (noting that non-PSD brought

in context of PSD appeal were outside the scope of Board jurisdiction over

decisions); In re Kawaihae Project, 7 107, 13 5 (EAB 1997) (denying

review of pennit condition to Title V operating permit because portion of was

a state pennit); In re W Suburban Recycling and Or., 6 692, 704 1996)

(,,[WJhere a permit proceeding involves requirements under both state and federal law,

the Board's IS to to the federal PSD program and Board will

not assume jurisdiction over permit unrelated to the PSD program."); re

        Co.           County, 2             280,281 (Adm'r 1986)                       that portion    a state-

issued combined permit to the federally delegated authority is reviewable under 40

C.F.R. § 124.19). Cf In re 8 iJ.ILJJ (EAB 1999)

    process is not an open forum for consideration of                       environmental aspect           a

proposed project, or even that on quality.").

                     the PSD program does not apply in nonattainment areas; it only applies in

areas to be in attainment or unclassifiable. CAA § 161, § 7471;

                                                      5

8 E.A.D. at 681-82; see also In re Prairie State Generating Co., 13 E.A.D. 1, 5-6 (EAB 2006).

In nonattainment areas, the NAA NSR requirements of the CAA and implementing regulations

apply in lieu of the PSD requirements. See CAA §§ 171-193,42 U.S.c. §§ 7501-7515; 40

C.F.R. §§ 51.160-.165; Sutter, 8 E.A.D. at 682 n.2. The EPA has granted New Jersey authority

to administer the nonattainment provisions pursuant to its approved Part D state implementation

plan. 9 Therefore, with respect to new sources in nonattainment areas, New Jersey is fully

authorized to issue permits under its own regulations, and such permits are not subject to

administrative review by EPA on appeal under 40 C.F.R. § 124.19. Am. Ref-Fuel Co., 2 E.A.D.

at 281 (declining to review a combined air permit issued by NJDEP where the permit condition

in question directly related to emissions offsets and the SIP-approved NAA NSR permit, not to

the federally delegated PSD permit.) As noted above, 40 C.F.R. § 124.19 limits the Board's

scope of review (under the CAA) to EPA-issued PSD permits, and therefore does not embrace

permits for new sources in nonattainrnent areas. Id.; see, e.g., In re Russell City Energy Ctr.,

LLC, PSD Appeal Nos. 10-02 through 10-05, slip op. at 119-127 (Nov. 18,2010),15 E.A.D._

("Russell City If') (finding certain challenges brought in the context of a PSD permit appeal to be

moot because of redesignation of area where permit was issued as nonattainrnent for pollutants

under scrutiny before final permit was issued).

   In this case, nothing in the petition challenges any of the provisions of the PSD permit.

Rather, the only challenge Petitioners raise pertain to statutory and regulatory requirements

   9 See supra note 6 and accompanying text.


                                              6

applicable in nonattainment areas. IO Because the issue Petitioners raise on appeal falls beyond

the scope of Board jurisdiction, and Petitioners do not raise any challenges to the conditions in

the PSD pennit, the Board dismisses the petition for lack ofjurisdiction.

     So ordered. II

                                                  ENVIRONMENT AL APPEALS BOARD

Dated: By:_~
___~L
LA.P- a. =.!. . .- _
Kathie A. Ste\in
Environmental Appeals Judge

    10 As NJDEP notes in its motion, NJDEP's Motion at 7 n.1, Petitioners claim that Hess'

environmental justice analysis "highlights the problem" of the alleged inadequate cost-'benefit analysis required under NJ. Admin. Code § 7:27-18.3. Petition at 8-9. Petitioner's principal argument is that "Hess failed to fulfill its obligation to demonstrate that the benefits of its Project and Site significantly outweighs its environmental and social costs in comparison with other sites. 42 U.S.c. § 7S03(a)(S); NJ.A.C. § 7:27-18-3(c)(2)." !d. at 10. Petitioners further state, "[h]ad Hess fulfilled its obligation to analyze alternative sites, NJDEP and the public would have had an opportunity to assess whether, for example, such other sites are in locations that have more or less adverse environmental burdens on their surrounding communities than the proffered . Site." ld. at 9.

     The Board does not read the petition to assert an independent environmental justice claim

that is separate from its underlying argument that NJDEP failed to evaluate alternative sites and whether the "benefits of the proposed project outweigh its environmental and social costs" as called for by the New Jersey NAA NSR law. See Petition at 8. Rather, Petitioners refer to NJDEP's environmental justice analysis as support for Petitioner's principal cost-benefit argument over which the Board has no jurisdiction. To the extent Petitioners are purporting to assert an independent environmental justice claim, as in Russell City 11, the Board denies any such challenge to the environmental justice analysis where the challenge is premised on a claim over which the Board lacks jurisdiction. Russell City 11 at 127, n.116. Cf Office of Environmental Justice, U.S. EPA, Plan EJ 2014 Legal Tools, at 11-12 (Dec. 2011), available at http://www.epa.gov/compliance/ej/plan-ejlindex.html, (noting the difference in the role EPA plays in pennitting decisions depending on whether the pennit is issued by a "delegated state" or by the state acting under state law.).

   II The three-member panel deciding this matter is composed of Environmental Appeals

Judges Leslye M. Fraser, Catherine R. McCabe, and Kathie A. Stein. See 40 C.F.R. § 1.2S( e)(1) .

                                              7

CERTIFICATE OF SERVICE

   I hereby certify that copies of the foregoing Order Dismissing Petition in the matter of

Hess Newark Energy Center, PSD Appeal No. 12-02, were sent to the following persons in the manner indicated:

BY U.S. First Class Mail: By EPA Pouch Mail William J. Schulte, Esq. Eric Schaaf, Regional Counsel Eastem Environmental Law Center Office of Regional Counsel · 744 Broad Street, Suite 1525 U.S. ,Environmental Protection Agency,
. Newark, NJ 07102 Region 2
290 Broadway
Bob Martin, Commissioner New York, NY 10007-1866 New Jersey Department of Environmental Protection 401 East State Street P.O. Box 402 Trenton, New Jersey 08625-0402

Jung W. Kim
Deputy Attomey General State of New
Jersey
RJ. Hughes Justice Complex
25 Market St., P.O. Box 93
Trenton, NJ 08625-0093

Hess Newark Energy Center
111 Delancy Street
Newark, NJ 07105

Raymond B. Ludwiszewski, Esq.
Justin A. Torres, Esq.
GIBSON, DUNN & CRUTCHER LLP
1050 Connecticut Avenue, N.W.
Washington, D.C . 20036-8500

                                           ~GtJ
       NOV 2 0 2012

Date:
---------------- . Secretary